Driven by fear rather than reason, in 2012 we saw hundreds of billions of dollars more flying the stock market coop in favor of the bond market pen. Here and now, I think most 2013 investors should make a resolution to reconstruct a more diversified and better balanced portfolio. (You don’t have to put more money to work, but you should make the most of your money at work.)

Typically, the new year brings a sense of optimism and hope for better times ahead compared to the one we left behind. But it also results in rebalancing portfolios; typically selling at least some of what worked best in 2012 in order to pursue lower priced and possibly undervalued opportunities in the year ahead.

On that note, I have been reading many year-end pieces that say 2013 is going to be a bad year for stock investors — a few pundits are even calling for another lost decade. If that’s the bad news, there’s worse: near unanimity on the risks of staying long at the long bond party. And while it’s important to know and note that consensus isn’t always or even mostly wrong, for a contrarian like myself, it has never made sense to simply accept a consensus view.

I do accept the consensus view that long-term government bonds are prone to a significant setback, with intermediate and shorter term government debt as prone but with lesser losses. In short, a recovering economy should make bond investors very nervous. A negative economic event or a weakening recovery should make junk-bond investors very nervous; the yield seeking rush into them has bloated their valuations and ability to sidestep missteps. But are investors going to sell all bonds and junk bonds en masse in 2013? I doubt it and I wouldn’t advocate it.

Looking at where we stand and where we are headed, for 2013 I like dividend-paying mega caps (they offer income opportunities and quality growth), and soft commodities (feeding the increasing hunger for everything from cocoa to wheat as set against the grain of more demand than supply and as subject to Mother Nature’s disruptions, from drought to typhoons). The potential for natural gas to fuel a bigger share of the tentative recovery is not a value trap so much as it is a recovery trap; if the recovery weakens … phut.

Europe’s stock markets look both undervalued and overlooked but remains a place where bottom fishing could become a bottomless pursuit. Japan’s equity markets look relatively attractive on a valuation basis, and my 2012 case for going long Japan’s markets and staying short the yen, remains in pace for 2013.

Even less loved than European bourses, money market funds (some yielding less than zero), could very well be a surprise gainer in 2013. If the market sells off on assumptions of fiscal cliff recessions, cash will rise in value as a solid defense. If recession fears wane and recovery signs wax, cash could offset the damage done to interest-rate-sensitive bonds. If we get signs of inflation, money market fund yields could do something we haven’t seen them do for along time; rise.

The rising tide for all bonds may be about to recede in 2013. And while the overall wheel of the U.S. bond market looks overblown, there’s still a risk management reason for owning some spokes, and an asset allocation argument for not abandoning bonds they way investors abandoned stocks.

In 2013, I’d advocate taking gains in each (and in proportion to) your portfolio’s investment (as opposed to your emotional) objectives; redeploy those gains into the unloved stock markets at home and abroad that are underrepresented in your current portfolio. Reconstruct a more diversified and better balanced portfolio. Against the dire predictions for a worse year, my investment picks should help you prepare for a better one.

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